Lumber's four-year high came from shrinking supply, not a housing boom
Thanks to Trump's tariffs on Canadian lumber, reduced supply has pushed US lumber prices TO A FOUR-YEAR HIGH despite slumping home sales.
TRUMP'S TARIFFS = A TAX ON AMERICAN CONSUMERS.
A four-year high in lumber would normally suggest that more homes are being sold. This time the opposite is true. US new single-family home sales were lower than a year earlier in June, while framing-lumber prices rose.
Housing demand and lumber prices split apart
The industry framing-lumber composite reached $535 per thousand board feet in July. That was the highest since September 2022 and 23% above a year earlier. The US Census Bureau, meanwhile, reported June new-home sales at a 628,000 annual rate, down 5.6% from a year earlier.
This is not a scene in which stronger home sales pulled lumber higher. When demand is weak and price still rises, supply deserves the first look.
Tariffs are not the whole explanation
Hanke points to tariffs on Canadian lumber. Most Canadian suppliers currently face 35.2% in antidumping and countervailing duties, with a separate 10% Section 232 tariff on softwood lumber since October 2025. A simple addition puts the border burden at 45.2%. Tariffs are not the whole explanation. West Fraser permanently closed four US and Canadian sawmills in late 2025, removing 300 million board feet of annual lumber capacity. Its reasons included weak demand, timber-supply problems, and elevated duties. Once low prices close a mill, supply does not instantly return just because the market tightens.
Tariffs reduce imports while closed mills reduce domestic and foreign capacity. Both paths meet in the same price.
A 45% wall may become a 35% wall
Preliminary results from the seventh US review would lower the standard antidumping and countervailing rate from 35.2% to 24.8%. The result is not yet effective and can change in the August final decision. The separate 10% Section 232 tariff remains, so the preliminary figures would still imply a roughly 34.8% total burden.
The US imposed a 10% Section 232 tariff on softwood lumber imports (White House, 2025-09-29)Investors should watch supply return, not only home sales
For builders, weak home sales combined with rising material costs are uncomfortable. It is hard to raise selling prices while lumber squeezes margins. For lumber producers, higher prices help, but closed mills and expensive timber can prevent a quick volume response. If the final August tariff falls as indicated but the all-in burden remains around 34%, a large supply barrier survives. If it drops below 30% and imports recover, Hanke's tariff explanation weakens. The next move in lumber depends less on a housing rebound than on Canadian volume and how quickly shuttered mills can return.
- Weak home sales and higher lumber prices at the same time point to a supply shock rather than a demand boom.
- The simple all-in tariff burden on Canadian lumber is 45.2% today and would still be about 34.8% if the preliminary seventh-review rates hold.
- The next test is whether the August final decision lowers that supply barrier materially.
Scheduled for gradingAwaiting grading
Sources
- Original post The claim linking higher lumber prices to Canadian tariffs
- The Wall Street Journal Framing-lumber prices and supply contraction
- US Census Bureau June 2026 new-home sales
- West Fraser Sawmill closures and capacity reduction
- Government of British Columbia Preliminary seventh-review lumber duties
- White House The 10% softwood-lumber product tariff